Consumer Products

Smith & Wesson issues mostly soft outlook

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Smith & Wesson Holding Corp. issued per-share earning guidance for its recently started business year mostly below expectations as the firearms maker reported earnings fell 13% on higher expenses and weaker margins during the quarter ended in April.

Shares fell 4.5%, to $15.38, in recent after-hours trading as the company's outlook for the current quarter also was mostly below analysts' views.

For the year ending in April 30, 2016, the company forecast per-share adjusted earnings of $1.02 to $1.07 and net sales of $605 million to $615 million. Analysts polled by Thomson Reuters expected per-share profit of $1.07 and revenue of $602 million.

For the current quarter, Smith & Wesson forecast per-share adjusted earnings of 21 cents to 23 cents and net sales of $140 million to $145 million. Analysts polled by Thomson Reuters expected per-share profit of 25 cents and revenue of $145 million.

Springfield, Mass.-based Smith & Wesson had continued to see signs that demand for consumer handguns was returning to normal. The industry had benefited in recent years from strong demand as gun enthusiasts stocked up on weapons amid speculation about possibly tighter regulations.

The company's accessories division, which consists of its Battenfeld Technologies Inc. acquisition, contributed sales of $14.6 million. The December acquisition of Battenfeld increase Smith & Wesson's presence in the hunting and shooting accessories market.

Earlier this week, U.S. gun-maker Colt Defense LLC filed for chapter 11 bankruptcy protection late Sunday after failing to reach a deal with its bondholders.

For the period ended April 30, Smith & Wesson reported a profit of $21.9 million, or 40 cents a share, down from $25 million, or 44 cents a share, a year earlier. Excluding one-time items, per-share earnings from continuing operations fell to 45 cents from 47 cents. Net sales increased 6.2%, to $181 million.

The company had expected per-share earnings of 39 cents to 41 cents on revenue of $175 million.

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